2022 (1) TMI 93 - AT - Income Tax

Exemption u/s 11 - intimation passed u/s 143 (1) - appellant submits that intimation u/s 143(1) merges with order u/s 143(3) and hence the appeal against intimation u/s 143(1) becomes infructuous - HELD THAT - Appeal before CIT (A) was against an intimation passed u/s 143 (1) of the act. Subsequently the assessment order u/s 143 (3) of the act has also been passed. In assessment order u/s 143 (3) of the act the assessee has been granted benefit of accumulation of total income. Therefore, the directions now issued by the learned CIT -A , after passing of the order by the learned assessing officer u/s 143 (3) of the act, (which was not subject matter of appeal before CIT (A)), will tantamount to giving direction to the assessing officer in the order passed u/s 143 (3) of the Act. Ld CIT (A) does not have any authority to give direction in orders which were not before him. Even otherwise the assessee has already filed such forms before the due date of filing of the return of income and is in conformity with the provisions of Section 11 (2) (C) of the act. Therefore, we do not find any reason for the learned CIT - A to give any such direction to the learned assessing officer. - Decided in favour of assessee.

Issues:
1. Appeal against order of CIT (A) regarding direction to the assessing officer.
2. Dismissal of appeal by CIT (A) based on technical grounds.
3. Denial of deduction under section 143(1) due to non-filing of Form 10.
4. Consideration of submissions made by the appellant by CIT (A).
5. Disallowance of depreciation and subsequent rectification application under section 154.
6. CIT (A) directing verification of filing of Form 10 & 10B.

Analysis:

1. The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-1, Mumbai for the assessment year 2016-17. The grievance of the assessee was related to the direction given by the CIT (A) to the assessing officer.

2. The CIT (A) dismissed the appeal filed by the appellant against the intimation passed under section 143(1) even though subsequent orders were passed under section 143(3) and section 154, deleting the disallowances made. The appellant argued that the intimation under section 143(1) merges with the order under section 143(3), rendering the appeal against the intimation infructuous.

3. The CIT (A) denied deduction under section 143(1) due to the non-filing of Form 10, which the appellant claimed was submitted within the due date. The CIT (A) also did not consider submissions made by the appellant on various dates.

4. During the appellate proceedings, the appellant highlighted that the assessing officer had already rectified the grievance through an order under section 154 and passed an assessment order under section 143(3), making the appeal infructuous. However, the CIT (A) directed the assessing officer to verify the filing of Form 10 & 10B, leading to the dismissal of the appeal.

5. The assessing officer disallowed depreciation, leading to a rectification application under section 154, which was subsequently allowed. The total income was adjusted, and the grievance of the assessee was settled through the rectification order.

6. The ITAT observed that once an appeal becomes infructuous, the CIT (A) cannot pass further directions. The CIT (A) erred in passing directions post the assessment order under section 143(3), which was not part of the appeal. The directions regarding the filing of Form 10 & 10B were deemed unwarranted and were deleted.

In conclusion, the ITAT allowed the appeal filed by the assessee, highlighting the errors in the directions given by the CIT (A) post the assessment order under section 143(3) and the compliance of the appellant with the provisions of Section 11(2)(C) of the Income Tax Act.

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